Appeal partly allowed, disallowances deleted, expenses reduced, grounds (3) and (4) not decided.

The appeal was partly allowed, with the disallowances of NSE and VSAT charges under section 40(a)(ia) being deleted. The disallowance of travelling and miscellaneous expenses was reduced from 10% to 5% of the total expenditure. Grounds (3) and (4) required no decision.

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Issues involved: Disallowance of NSE and VSAT charges u/s 40(a)(ia) of the Income Tax Act, 1961 and disallowance of travelling and miscellaneous expenses due to lack of vouchers.

Disallowed NSE and VSAT charges: The Assessing Officer disallowed NSE charges and VSAT charges under section 40(a)(ia) as tax was not deducted u/s 194H. The assessee argued that payments to sub-brokers for securities transactions were not covered by section 194H. Tribunal held that VSAT charges were not fees for professional services u/s 194J and thus disallowance was incorrect. Regarding NSE charges, it was clarified that payments to sub-brokers for securities transactions were not subject to tax deduction u/s 194H. Consequently, both disallowances were deleted.

Travelling and miscellaneous expenses: The Assessing Officer disallowed a portion of these expenses due to missing vouchers, estimating the disallowance at 10%. Tribunal found the disallowance excessive and reduced it to 5% of the total expenditure. This ground was partly allowed.

Conclusion: The appeal by the assessee was partly allowed, with disallowances of NSE and VSAT charges under section 40(a)(ia) being deleted. The disallowance of travelling and miscellaneous expenses was reduced. Grounds (3) and (4) required no decision.

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